06 Higher Expense Ratio Lower Loss Ratio Lower Expense Ratio Lower Loss Ratio Lower Expense Ratio Higher Loss Ratio 0% 20% 40% 60% Source: AM Best Only 22% of outperforming insurers demonstrate both lower loss and expense ratios, underscoring the extensive opportunity for improved operational efficiency across the industry. Friction gaps affect more than just operational expenses. Imperfect business practices that are difficult to change also impact underwriting decisioning, risk selection, lack of visibility on book development impacting management's ability to make fully informed decisions, sub-optimal claims settlement, sub optimal reserve management, and distribution management that is not as effective as it should be. The result is that the operational friction negatively impacts the loss ratio, dragging down the entire combined ratio. Insurers with Combined Ratios LOWER than the Competition The Friction Gap Only 22% of outperforming insurers demonstrate both lower loss and expense ratios Bridging the Friction Gap: Revolutionizing P&C Insurance Operations